Tenet Healthcare’s CFO, Daniel Cancelmi, for one, said requiring companies to rotate their auditors will not provide any additional audit quality that isn’t already being provided by having lead audit partners rotate. (Sarbanes-Oxley mandates that the lead partner in an audit firm rotate off the audit project every five years.) “We believe the current five-year rotation requirement of lead audit partners captures substantially all the benefits of mandatory audit-firm rotation in a cost-effective manner, including the important attribute of a fresh set of skeptical eyes,” he said.

Recommended Stories:

Cancelmi also believes companies that have adopted a new audit partner have already jumped through the necessary hoops they’d have to if they hired a whole new audit firm. When the lead audit partner rotates off as Tenet Heathcare’s just did, he notes, management performs a review and provides all critical background information on a company’s business to the new partner, which is “tantamount to the process that occurs when a company changes auditors.”

Nathalie Berger, head of the audit unit at the European Commission, noted at the meeting, however, that “mandatory” needs to be added to the rotation concept. In the European Union, for example, companies, with the exception of Italian firms, voluntarily rotate auditors. Often, however, European companies don’t actually switch auditors on their own.

The United States, for its part, is still on the fence about mandating audit rotation. At issue is whether the PCAOB should consider an audit-firm rotation requirement for tenures of more than 10 years for all issuers or just for the issuers of the largest audits.

Patrick Mulva, vice president and controller of ExxonMobil, however, said global support for mandatory audit-firm rotation is just not there. “Mandatory auditor rotation has been met with . . . universal rejection by board audit committees, including ExxonMobil’s, as the proposal diminishes the audit committee’s role in hiring, assessing, and firing audit firms.”

It’s precisely the audit committee that T. Cory Bleuer, vice president, controller, and chief accounting officer of cloud-software firm BMC Software, pointed to when he voiced his opposition to the auditor-rotation concept at the meeting. “Independent audit committees are in the best position to reinforce auditor independence through their critical oversight role. Mandatory rotation could, in fact, actually weaken the effectiveness of this core responsibility,” he said. If the requirement is mandated, audit committees would then have less of a choice in decisions about when to switch auditors, he suggested.

Mulva also credited the strong oversight role that the PCAOB currently enjoys as a key reason to avoid having mandatory audit rotation. “We recognize this oversight role has improved objectivity and independence of audits performed on all public companies,” he noted. The improvements in PCAOB scrutiny have made mandatory auditor rotation redundant, according to Mulva.

The PCAOB’s public meeting this week was the third part of a series of meetings held on auditor independence. Previous meetings were held in Washington, D.C., in March and San Francisco in June.